More People Donating Online, Say Fundraising Costs a Key Concern

(May 10, 2011) A new study shows that more donors from every age group are going online to make a donation, and they are increasingly sensitive to over-solicitation and fundraising costs.

Things seem to be looking up for philanthropic giving in 2011 as 79 percent of U.S. donors surveyed recently said they plan to give the same or more to charitable causes this year. One-quarter of all donors said they would increase their donation this year, while only 7 percent expect to give less, according to a survey of more than 17,500 donors conducted by Cygnus Applied Research Inc.

The Online Migration

More and more, this giving is taking place online. Sixty-five percent of respondents said they plan to make at least one gift on a charity's website this year. And, a majority of donors from each age category plan to give online in 2011 for the first time in this annual study. Fifty-three percent of donors over 65 plan to make an online gift this year, 69 percent of those between 35 and 64 plan to do so, and a large majority of donors under 35 (86 percent) plan to give online.

Even donors who are responding to direct mail pieces from a charity are choosing to make their transaction online. While 66 percent of donors responding to direct mail appeals in 2010 chose to donate through the mail, 29 percent went online to the charity's website to make a gift.

Looking ahead to 2011, while 43 percent of direct mail donors plan to continue giving through the mail, 26 percent said they plan to give less (less money, less often or both) or stop giving through the mail altogether this year. The results show that while direct mail is stimulating fewer mailed transactions, it is increasingly playing a role in stimulating online activity.

Cost Concerns

Donors say that it is more than just a sense of convenience that is drawing them to the online giving option. They are also concerned about fundraising costs. While 50 percent of donors who plan to donate online this year said that they will do so because it is convenient, 25 percent of people cited cost-effectiveness as a factor in their choice of how to give. This was particularly true for donors over the age of 65.

The donor study also separated online donors into two types: Those who opt to give online as a decided preference and those who include online giving among other transaction methods. Thirty-one percent of donors who prioritize online giving over other methods said that multiple forms of solicitation will not cause them to give more often or more generously, and an additional 49 percent said that soliciting them in ways other than online will actually persuade them to give less or stop giving altogether.

Penelope Burk, president of Cygnus, advises nonprofits to identify donors who only give online and take a hard look before sending them direct mail pieces or adding them to the telephone call list.

"As giving online is a conscious choice in order to maximize return on investment, it is counter-productive to attempt to increase giving frequency or accumulative gift value by soliciting these donors through more costly methods," the report notes.

Burk says that donors who give online prefer to be contacted via email and are interested in getting information about the impact of their gifts. She says the amount of communication is not the problem, it is the amount of solicitations.

"Asks are very powerful," Burk explains. "You should not ask before you have communicated the impact of a previous gift. However when you do ask, it should be clear and persuasive."

The Cygnus Donor Survey: Where Philanthropy is Headed in 2011, is available at www.cygresearch.com. The report provides an overview of giving trends by donors in 2010, donors' plans for giving in 2011, and explores topics including donor retention, giving patterns, social media and board fundraising. This report is based on a sample of donors in the United States. A separate report is available covering donor trends in Canada.